UK employers are struggling with the worst labour shortages for almost a quarter of a century as the reopening of the economy continues.
The Recruitment & Employment Confederation (REC) warned that the availability of workers was deteriorating at a record pace, fuelled by factors such as increased hiring, Brexit, pandemic-related uncertainty and the furlough scheme.
The latest REC/KPMG UK Report on Jobs survey revealed that in June permanent staff appointments expanded at the fastest rate since the survey began in October 1997, while temp billings grew at their highest level for nearly 23 years.
But during the same time period, the availability of workers fell at an unprecedented rate, leading to a sharp increase in starting rates of pay.
The demand for staff continued to move beyond crisis-hit sectors such as hospitality, with jobs in IT and computing rising the fastest in June, followed by hotel and catering jobs and engineering.
Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK, said the latest figures showed action was needed to address the country’s skills gap: “For the fourth month running we’re seeing a decline in the availability of candidates to fill all these new roles and the most severe deterioration for 24 years. We need action from businesses and government to reskill and upskill furloughed and prospective workers now more than ever, as the increasing skills gap in the workforce has the potential to slow the UK’s economic recovery.”
Neil Carberry, Chief Executive of the REC, added: “Recruiters are working flat out to fill roles across our economy. The jobs market is improving at the fastest pace we have ever seen, but it is still an unpredictable time. We can’t yet tell how much the ending of furlough and greater candidate confidence will help to meet this rising demand for staff. In some key shortage sectors like hospitality, food, driving and IT, more support is likely to be needed to avoid slowing the recovery.
“That means supporting transitions into growing sectors through unemployment support and new skills programmes, as well as making sure the new immigration system reacts to demand, as promised. But it also means that hiring companies need to re-assess their workforce plans. In a tight jobs market, working with professional recruiters to position your firm as an employer of choice is a must.”
Further pain ahead
The situation is likely to get even worse when the travel industry gets back on its feet if the results of a separate survey are to be believed.
Ahead of Grant Schapps’ announcement of the scrapping of home quarantine for fully vaccinated travellers, job board CV-Library ran a survey of travel and tourism workers and found that almost 60% were not planning to return to the industry.
Of those responding to the survey, 68.4% believed the industry would face a shortage of workers, with 58.1% saying they weren’t considering returning even once the industry is fully operational again.
When asked why they were turning their back on the industry, the main reason was that it had shut down and jobs were no longer available. However, almost a third of respondents (30%) said they felt the industry was too unpredictable and almost half (47.2%) felt that the salaries and benefits on offer were now worse than in pre-pandemic times.
Lee Biggins, CEO and founder of CV-library, said: “These results should be alarming for employers, but, sadly, they aren’t surprising. We’ve all witnessed the impact of this pandemic on the hospitality sector and the travel and tourism industry has been the hardest hit sector of all. As such, a shortage of candidates when the restrictions are lifted feels somewhat inevitable.
“It’s crucial that businesses take notice of these results and listen to job seekers. There are plenty of staff out there but, in order to recruit, businesses can’t just pick up where they left off. Competitive pay and benefits must be offered, and with the industry unlikely to be provided with much notice to get back up and running, those with the strongest employer proposition will win the race for talent.”
One potential avenue employers grappling with shortages may wish to explore is adapting some of their positions to appeal to the graduate market.
Though vacancy numbers as a whole may be rising, in the graduate market the reverse is true: data from job board network Broadbean showed that graduate and training vacancies were down 66% on pre-pandemic levels in the first half of this year, as well as being down 34% on the first half of last year, when the country was in the thick of the pandemic.
This has led to a situation where the number of applicants per graduate vacancy now stands at 51, up 46% on 2019 numbers.
Alex Fourlis, Managing Director at Broadbean Technology, said: “It is concerning to see that graduate and early careers recruitment is faring considerably worse than other areas of the employment market.
“The fact that vacancy levels today are considerably lower than during the pandemic suggests that while employers are investing in experienced talent at a time when many sectors are contending with skills shortages, there is a real threat that this dearth of talent will be exacerbated in the coming months and years if graduate and early careers recruitment isn’t prioritised by companies.”
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